1. Yes, as with many "rules" in language there are exceptions. I would find it a bit odd to refer to a baby as "it" in (current) English, though I do admit there are some situations where it wouldn't feel as out of place.
In my read of the Bible quote, it's not really referring to a person as "it" in the same way.
2. Grammatical gender has nothing to do with the "vibes" of an inanimate object - it's quite arbitrary, really. The problem you're associating here is much more with gender in humans, but we were talking about the grammatical construct applied to objects (like a chair as the grandparent mentioned).
So, as far as I understand it, gender pronouns are typically for referring to individuals. This means that whether to call a baby, or animal, by gender pronouns or object pronouns varies depending on the expectation.
('gender pronouns' includes singular they/them, which is a 'gender pronoun' in the way that it perhaps, if you will, implies the 'gender' of 'neuter'...)
I guess a generally understood term for this would be "humanization", although as someone who identifies non-human that still sounds somewhat exclusive, but regardless, that is what I generally observe to be the difference.
So, it's possible to refer to a baby or an animal as an object, if, in doing so, you intend not to assign that object any individuality; in other words, if you're referring to it in a non-individualistic way.
e.g. "I needed to change its diaper again today" ("dehumanizing"; I guess shows a lack of empathy, but not everyone necessarily feels empathy for the baby before it is more markedly an individual)
It's also possible to refer to a non-individual (such as an inanimate object) as an individual, which, in doing so, typically implies that the non-individual nonetheless has some sort of individuality or that you're specifically assigning it such.
e.g. referring to ships / other vehicles using 'she'; also, giving everyday objects individuality is a relatively common part of Japanese culture (which is part of why Apple's recent "Crush!" ad upset so many)
Typically, it's respectful to refer to people as individuals because they are. It is "dehumanizing" to suggest otherwise. (seriously, is there a better word for this?)
Some prefer to be referred to as objects instead, though; I know at least one like this. But those will typically specify it in some way, and it's rude not to refer to any one as an individual unless otherwise specified.
In my read of the Bible quote, it's not really referring to a person as "it" in the same way.
2. Grammatical gender has nothing to do with the "vibes" of an inanimate object - it's quite arbitrary, really. The problem you're associating here is much more with gender in humans, but we were talking about the grammatical construct applied to objects (like a chair as the grandparent mentioned).